Health Insurance Plans in China and How it is Unique from the Rest of the World
- jcnoble00
- Nov 30, 2022
- 5 min read
Similar to Singapore, I will begin by discussing the healthcare system in China, and how it works. Healthcare coverage is a challenge, and all governments are constantly trying to figure out the best way to handle this. This should be a human right everyone has access to for free. Of course, this must be addressed in China where they provide care for 1.4 billion people, with hospitals treating about 8 million patients per year. The Chinese government has stated that a prosperous society can not be achieved if the people are not healthy. This is why in China, everyone is covered by the largest basic health insurance plan in the world, and why they are in the process of making many infrastructural changes (such as the improvement of public restrooms) that will result in better health. These changes also result in fewer medical conditions and diseases and so they lead to less money actually being spent on sick people. Health insurance and healthcare in China are also improving as they are one of the fastest ascending countries in life expectancy, with the average age being a little over seventy-six.
In China, health insurance is split up into workers and those who don't work. For those who work, the residency insurance is paid by the employers, whereas, for those who don't work the insurance is paid by the government. The hope is that in the future, individuals will be able to pay for a small portion of this out of pocket. Even though the World Health Organization suggests pocket costs shouldn't exceed 20%, the goal in China is that individuals would be able to pay for up to 30% of the costs. The issue you run into here is when people aren't working or don't have that much money and aren't able to pay. This is another issue that is going to have to be addressed in the future.
As explained in this video, previous to the changes that have begun to take place, healthcare was too expensive and not equal for everyone. The basic plans did not cover many simple procedures. In many situations, people simply couldn't afford care and as a result, had to suffer without treatment. Chinese citizens had to pay more out-of-pocket expenses than people in almost any other country. These payments were also required upfront before treatment. During this time, the hospitals and healthcare systems declined as they were not a priority of the government. Thankfully, the government has begun to realize the inadequacies of this and has begun to slowly change.
China is working on creating a universal health insurance system and some groundwork has been laid but more steps must be taken. The goal would that be there would be equal medical services for all citizens. Even though there have been improvements in the Chinese healthcare system and insurance options are improving, there is still a lot to be done.
Over the past ten years, the Chinese government has been doing a lot in the ways of health care reform. This initiative involves social health insurance plans for all, strengthening infrastructure, and reforming hospitals and other healthcare facilities.
How China Attempted to Provide Universal Healthcare
China is working on a system to achieve near-universal coverage through publicly funded basic medical insurance. The urban employees are required to opt-in to an employment-based program that is funded by the employer. Other residents who don't work can voluntarily enroll in the Urban-Rural Resident Basic Medical Insurance which is primarily financed by the local and central governments. At the local level, the local health commissions organize public and private healthcare to deliver services. The basic medical insurance plans cover primary, hospital, and some specialty appointments, along with prescription drugs and other medicines. Complementary private health insurance helps to cover any coverage gaps.
In 2011 China attempted to achieve universal insurance coverage through there public insurance programs:
Urban Employee Basic Medical Insurance: This plan is mandatory for urban residents with formal jobs and was launched in 1998
Voluntary Newly Cooperative Medical Scheme: This option was offered to rural residents starting in 2003
Voluntary Urban Resident Basic Medical Insurance: This was begun in 2007 to cover urban residents without jobs including children, the elderly, and self-employed.
In 2016 China's central government merged the Newly Cooperative Medical Scheme and the Urban Resident Basic Medical Insurance to reduce administrative costs. However, this consolidation is still underway. Once this is fully integrated it will be called the Urban-Rural Resident Basic Medical Insurance. The Chinese central government is responsible for national health legislation, policy, and administration, and is responsible for organizing and providing these services. In 2018, the government reorganized the healthcare structure and created different departments to handle different areas of healthcare, with the National Health Commission being the main national health agency. The State Medical Insurance Administration oversees basic medical insurance programs.
Now that we have a basic understanding of how the systems operate and work it is time to get more into the specifics. In China, approximately 95% of the population is covered by a public insurance plan. China spends about 6.6% of its GDP on healthcare, which comes out to about 5,912 billion dollars. As far as the healthcare costs themselves, 28% was paid by the central and local governments, 28% was paid out of pocket, and 44% was financed by publicly funded health insurance or private insurance. What do you do if you get sick? What are the care facilities available in China? The answers to these two important questions can be seen in the images below.
For more detailed information please read this article titled: How does China's Healthcare System Actually Work?
Public Response
Studying the public's perception of the health systems allows valuable information on the performance and future directions that need to be taken. A study tested the public response to the changes in the health systems from 2006-2019. Seven waves of the China Social Survey (a nationally representative survey) were conducted in different years to observe public satisfaction. Variables such as sociodemographics, patient experiences, and unique characteristics were all taken into account. The results showed that satisfaction with the healthcare system increased from 58% to 77% between 2006 and 2019. Similarly, perceived fairness also increased from 50% to 72%. Both indicate that the improvements have made an impact. They also found that these two measures most likely increased after the financial investments in public health insurance by the government in 2013. They also surveyed individuals and found that in order to continue to improve satisfaction and a higher sense of fairness, China's health system must continue to reform hospital incentives and improve the quality of care.
Conclusion:
In closing, China has made a lot of good improvements in the last few years. Public satisfaction has increased and the quality of care has also improved. It is clear that even with these major improvements there is still more work to be done in order to achieve equal care for everyone in China. Hopefully one day in the future, this will be the case.
If you are looking to move to China and need insurance, here is everything you need to know.
InterNations: Health Insurance and Healthcare in China Explained for Expatriates
Resources and References:
Eye on Asia / Understanding Healthcare in China
The Commonwealth Fund / China
China-Britain Business FOCUS / How does China's Healthcare System Actually Work
BMC Health Services Research / How do Chinese people perceive their healthcare system? Trends and determinants of public satisfaction and perceived fairness, 2006-1019.
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